Concerns arise that new pipeline route would allow Russia to strip Ukraine of its remaining economic leverage

BRUSSELS—Thursday’s summit of European Union leaders will elevate to the highest political level a fight over a new Russian natural-gas pipeline that is supported by Germany but strongly opposed by the U.S., which fears could further undermine Ukraine’s financial and political stability.

The dispute over the planned expansion of OAO Gazprom’s Nord Stream pipeline, dubbed Nord Stream 2, has been simmering below the surface for months, especially since German Economy Minister Sigmar Gabriel promised to protect the project from...